Monday, January 23, 2012

New York City: Socialism for the lucky few

Janio Marrero is a very lucky man. As facilities manager and technical director at the Cherry Lane Theater, Mr. Marrero can rent a lovely apartment above the theater at a discount — a serious discount. For the West Village one-bedroom with exposed brick and wide-beam floors, he pays $750 a month

Yes, it is the stuff that dreams, and apartments on the television show “Friends,” are made of. But compared with what his neighbors pay? Meh.

Just across the hall, a tenant named Arnold Warwick, who has had the same address for a half-century, pays $331.76 a month.

“I don’t plan on dying because I don’t want to give up a rent-controlled apartment,” said Mr. Warwick, who is 80. “I pay so little I’m almost embarrassed.”

In New York City, there is no shame in forking over thousands of dollars a month to live in somebody’s basement or crawl space. This unfortunate hiccup in the magic of the city makes the 16,000 remaining rent-controlled units in Manhattan mouthwatering in almost any context.

Cheaper apartments than the ones above the Cherry Lane do exist in the five boroughs, and a few of them even rent for less than three figures. But Mr. Warwick’s apartment, which has four small bedrooms built up around a wide-open living room, isn’t just cheap. It is also a fabulous apartment.

With 11-foot ceilings, exposed brick walls, piles of hardcover books, and views of chimneys and water towers, it is a 1,200-square-foot monument to the Greenwich Village of our fantasies.

His home is nestled on Commerce Street, a windy little road that stood in for Paris on the series finale of “Sex and the City.” A two-bedroom apartment in that area rents for an average of $4,745 per month, according to the brokerage Citi Habitats. And just down the block at 17 Commerce Street, a 2,200-square-foot federal style town house is currently for sale for $4.975 million.

5 comments:

Rent control no longer exists. It was a short-term plan introduced in the past in 1942. President Franklin D. Roosevelt signed the Emergency Price Control Act into law. The goal of the act was to prevent inflation in the booming, fully employed wartime economy by setting price controls nationwide. The law was later changed, but some have continued to be grandfathered in based on the laws on the books back when.

Rent stabilization was introduced later allowing reasonable increases in rents. This was done because construction and vacancy rates slumped, causing non-regulated rents to rise nationally. This rapid increase in rents caused New York to introduce rent stabilization. This is an important aspect of urban living that may not seem necessary to suburban and country dwellers. Most buildings are not owned by resident landlords, but these landlords have a significant influence on the community in which they own property. Sudden increases in rent, even when based on 'the market', can dramatically disrupt the social fabric in an area. This is especially true in poor and lower working class areas where people truly rely on their neighbors to get by. Gentrification is usually good for the richer folks coming into a low cost neighborhood and those who own property, it isn't usually good for renters in that area. Stabilization balances the needs of persons with the profit motive of landlords and the rights of others to spend money as they see fit (buy low, sell high). Lack of rent stabilization would result in NYC looking a lot like Paris where all the poor are segregated in the outer rings of the city facing significant commutes into the city to work. That's great for industry, efficiency and profit, but bad for society, community, families, etc.

Landlords are also not forced to offer rent stabilization. It is usually offered as an incentive in soft real estate markets or in less than desirable neighborhoods. They know what they're offering and what they are agreeing to. Complaining about it years later isn't right. These agreements are also part of the deal when an investor buys property in NYC, they inherit all previous rent stabilization agreements. They knew what they were buying, or should have.

Government's job is not to make people and families as fluid a commodity as possible for the sake of real estate investors and landlords. The state can and must balance the needs of society, neighborhoods, communities, families, etc. over and against (sometimes) the profit motive.

This is not to say rent stabilization in NY is a perfect system. Far from it. There are unintended consequences for those on both sides of the argument, landlords and tenants rights advocates. There may be other ways to ensure affordable housing that does not segregate the poor into certain, far flung neighborhoods. Again, this might not be a problem in other areas of the country, but a megalopolis like NYC is a difficult place to live and work if you are essentially kept from living in areas with easy access to transportation. This exacerbates poverty, the break up of families, crime, racial and ethnic tension, etc.

It's important to note the source in these arguments. When landlords rights groups and multihousing unit industry associations and the Cato Institute argue that rent regulation drives out affordable housing one must ask: Qui bono? When experts on and advocates for the poor and for affordable housing argue against rent regulation, then that's a source that actually cares about affordable housing. Otherwise, it's just a useful excuse to argue for the goals of the market over society and community.

The upper class is systematically isolating itself. Of course, Murray is somewhat abusive of the victim here: check out the NYT piece on apple - America has systematically eliminated middle class opportunity. We are past the point of no return for the middle class now, largely due to free market ideology.

Any way you slice it a little rent control is a very healthy, very good thing, but far too little, far too late.

We are past the point of no return for the middle class now, largely due to free market ideology.

No. We are past the point of no return thanks to social democracy and Keynesian economics. What is happening now is the rich are no longer allowed to become poor. This is at least as vital to social mobility as allowing the poor to become rich (which both the income and estate taxes are designed to retard). Immigration and student loans also play large roles in retarding upward mobility, but you will never read about that in Mother Jones or Common Dreams.

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